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Don’t let Vietnam become the delectable piece of cake for foreign contractors
Vietnamese enterprises can absolutely act as EPC (Engineering/Procurement/Construction) contractors in big projects, Pham Thi Loan, a National Assembly’s Deputy, a businesswoman, said with decisive tone on the sideline of the ongoing National Assembly session.
In the speech presented before the National Assembly, you mentioned a hot topic that up to 90 percent of projects chose Chinese contractors as EPC contractors. It seems that you think that there are existing problems in the Bidding Law?
The bidding law stipulates that the contractors who offer the lowest prices will win the bids. Meanwhile, we should set up the regulations and install technical barriers to prioritize domestic contractors.
For example, regulations should be set up in a way, so as to force foreign contractors to use equipment and a labor force provided by domestic companies, that is if the equipments and workers can be provided domestically.
For example, domestic enterprises can already make transformers, and contractors, both foreign and domestic, have to use domestically made transformers. Contractors also should be asked to use Vietnamese construction workers. Meanwhile, as Vietnamese enterprises still cannot manufacture turbines, the products could be sourced from foreign manufacturers.
Your statements have reminded me of some big thermopower plants at which Chinese contractors are EPC contractors. Experts have complained about the quality of the projects because the plants consume too much coal, while the technologies used in the plants do not fit domestically made coal. Can you see any consequences from the low quality thermopower plants?
The first consequence is that Vietnamese people lose jobs into the hands of foreigners. Second, we cannot control the laborers, who come from China to Vietnam. Third, we have become reliant on China. For example, the plants have to buy everything from China, including the screws, because this kind of screw is only made in China.
Do you think that Vietnamese enterprises are not capable enough to work as EPC contractors and investors have to choose Chinese contractors, especially for energy and mining projects?
I do not think that Vietnam cannot undertake the EPC contractor role in big projects.
The problem is that they offer very low prices in order to get jobs. The bidding at low prices may be a part of their strategies to conquer Vietnam’s market.
If a restaurant has many customers, it still can make fat profit even when it sells products at low prices. However, if it has few customers, it has to sell products at higher prices to cover expenses. That is why Chinese contractors take on many projects, offer low costs and their competitiveness has been upgraded.
Let’s talk about a topic of the public’s interest, the discriminatory treatment towards state owned enterprises and private enterprises. What would you say about this?
The Prime Minister has promised to give equal treatment to all economic sectors and not to give special preferences to any enterprises.
At present, state owned enterprises still can enjoy privileges in many fields, especially access to the land fund and access to capital. The problem is that while the enterprises can enjoy so many advantages, they do not have to fulfill any criteria except taxes.
The state is a large shareowner, who injects capital investment in enterprises, and the enterprises which use this money, are obligated to bring profit, and social, economic and political benefits.
It is necessary to set up requirements and targets that state owned enterprises must fulfill every year. Currently, there is no mechanism that says how to deal with enterprises which cannot reach the targets.
Under the current laws, a bank must not lend more than 15 percent of their chartered capital to one business. However, in fact, many state-owned enterprises still can borrow more than the allowed sums.
Meanwhile, private enterprises have to “swim themselves”, with no support.
Lan Anh
vietnamnet
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